The study examine the perceived impact of corporate social responsibility in the Nigerian commercial banks in order to investigate the two constructs of independent and dependent variable one study objective was formulated as (i) To investigate if internal CSR practices have influence on employees’ performance in the Nigerian banks. A qualitative method was adopted for the study because flexibility in data gathering was essential to understand the internal CSR practices of the banks. The sample population for the interviews was directors and executives of CSR from the main six banks operating in Nigeria based on their per-capital shares and nationwide presence. The interview questions were opened ended in nature and structured based on the findings of literature on internal CSR and divided into sections. The Nvivo9 software was used to conduct the analysis of the data collected. The finding revealed that ta number of factors could contribute to the level at which internal CSR influence employee’s performance.
Keywords: Corporate social responsibility, Employee’s performance, Commercial banks and Nigeria.
Received: 24 February 2017 / Revised:20 April 2017 / Accepted: : 22 June 2017 / Published: 3 August 2017
The subject of CSR is unique and in some cases vague (Carroll, 1999; Aaronson, 2003; Dahlsrud, 2006). The vagueness of CSR has been attributed to its subjectivity (Carroll, 2008) because it is circumstantial in nature (Siefurt et al., 2003; Jones et al., 2007) and do not hold the same approach from other theoretical fields in management such as human resources management or financial management. The work by Theofilou and Watson (2014) noted that CSR is the response to the need for more ethical business practices and that there was no single way to understand or approach it. However, stakeholder satisfaction is a vital part of the concept and practice of CSR (Fombrun, 2000; Hopkins, 2003; Crowther and Rayman, 2005; Richardson, 2008). To support this claim, a definition by the European Union Commission (EUC) (2002) viewed CSR as a concept whereby companies integrate social and environmental concerns in their business operations and stakeholders on a voluntary basis. They further explained that the concept of CSR is achieving commercial success in ways that honour ethical values and respect people, communities and the natural environment. Hence, the concept of CSR focuses on policies, practices and tools organisations use to meet the expectations of a combination of both external and internal stakeholder demands, including customers, employees, pressure groups, environment, legal and government requirements (Bauman and Skitka, 2012).
Although, the developed world sets the pace for CSR engagements, it is argued that different regions of the world exhibit this concept in their own unique ways; hence making it difficult to have a universally accepted practice. Vast amount of literature on CSR exist especially on external stakeholder influence from a developed world perspective. For instance, studies on CSR in the developed world by Frederick et al. (1992); Siefurt et al. (2003) and Hsieh (2006); Honders (2007) found organizations’ in the developed countries engage in CSR through partnerships with charities and adherence to governmental requirements.
1.1. Statement of Study Problem
There is increasing awareness of the contribution of the Nigerian banking sector to the overall development of the country (Terungwa, 2011). The former Governor of the Central Bank of Nigeria corroborated this view in a statement highlighting the need for the public to be more aware of the social and environmental performance of the banks; hence attempting to make CSR an issue of public matter and creating public awareness on the presence of the banks CSR (Nwosu, 2005). The former CBN governor was of the opinion that the public can act as a force that monitors the banks CSR activities, which could ultimately aid the development of the communities at large. As noted earlier, study work on internal CSR and the banking sector of Nigeria is scanty (Amaeshi et al., 2006) and the existing ones are generally focused on multinational companies and not indigenous local Nigerian organisations. This gap in literature creates the need to understand CSR from the banking perspective in Nigeria because of the contributions of commercial banks to the nation’s economy.
1.2. Objectives of the Study
1.3. Significance of the Study
Firstly, in filling the existing knowledge gap on the practice of internal CSR within the Nigerian banking sector and how these practices affect the internal stakeholders, which are the employees of the banks. Secondly, it relevant in improving knowledge of how internal CSR practices contribute to positive behavior bank employees thereby contributing to social change in the areas of human capital development, enlightenment on the level of CSR development in Nigeria, institutional development and good governance within the Nigerian banks and other developing nations. Thirdly, it also contributes to the growing literature in internal CSR practices in the developing countries with a particular reference to Nigeria. Lastly, it benchmarks internal CSR practices in the Nigerian banking sector with global best practices, which is important in assessing the Nigeria banking sector with its contemporaries in the world when it comes to internal CSR practices.
2.1. Theoretical Framework
2.1.1. Relevance of Stakeholder’s Theory, Organizational Identity Theory and Social Exchange Theory to the Current Study
Stakeholder’s theory suggests that, the purpose of a business is to create as much value as possible for stakeholders in order to succeed, and be sustainable over time. In business, managers must keep the interest of employees and stakeholders aligned and going in the same direction.
In his influential book titled, Strategic Management; A Stakeholders Approach, Freeman (1984) put forward the argument that: Stakeholders is any group or individual who can affect or is affected by the achievement of the firm’s objectives. He redraws and maps the traditional input/output model of the firm as:
Fig-2.3. Stakeholder mapping of Nigeria Banks
Source: Freeman (1984).
Freeman set the agenda for what we now call stakeholders theory.
Following the evolution of CSR, Stakeholder’s theory has emerged as the dominant paradigm in CSR discussions. According to the stakeholder’s theory, Freeman (1984) asserts that firms have relationship with many constituent groups which always have interest in the activities and outcomes of a firm. These groups among other includes: Employees, Customers, Suppliers, Environmentalists, The community as a whole, Owners/ stakeholders as seen in the above fig. 2.3 (Donaldson and Preston, 1995; Margolis and Walsh, 2003). Stakeholder’s theory marks as an important theory that should not be omitted in the literature on CSR and employees discussions (Jones et al., 2007; Aquinis, 2011).
Studies by (Donaldson and Preston, 1995; Davenport, 2000; Ruf et al., 2000; Jones et al., 2007; Aquinis, 2011) have all suggested that stakeholders theory should be the foundation of CSR framework. Adding on, CSR has been presented as a tool for treating stakeholders in a reasonable and responsible manner. In line with this line of argument, Turnbull et al. (1999) asserted that, CSR is overall relationship between the organization with both its internal and external stakeholders, including customer, employees, communities, government, suppliers, company owners or investors and competitors. In the light of the above, the stakeholder’s theory has identified who are the categories of elements companies should focused their CSR initiatives on.
The justification for the relevance of stakeholder’s theory to this research work is based on the fact that, employees are major stakeholders in any organization. Freeman (1984); Donaldson and Preston (1995). Therefore, conducting a research to investigate the relationship between Corporate Social Responsibility (CSR) and employee performance in the developing countries particularly Nigeria banking sector makes the adoption of stakeholder theory, organizational identity theory social exchange theory relevant as theoretical framework of this study. See Freeman (1984); Donaldson and Preston (1995); Aguilera et al. (2006) Social exchange and organizational theories, Rayton (2007) Social identity theory Albinger and Freeman (2000) organizational theory (Gottel et al., 2015) Social exchange theory: Mei Peng low and McCabe (1993): Stakeholderts theory, Organizational identity theory and social exchange theory combined as adopted in this current study.
This study found stakeholder’s theory, organization identity theory and social exchange theory relevant to this current research as stakeholders based research work. See (Mei Peng low and McCabe, 1993).
2.2. The Influence of CSR on Employees
Previous studies on CSR have given very limited attention to employees as a specific unit of analysis (Swanson and Niehoff, 2001; Rupp et al., 2006; Aguilera et al., 2007) as emphasis has largely been on the relationship between leadership and corporate social behavior (Waldman et al., 2006; Swanson, 2008). Although there have been some studies that incorporated theoretical models of corporate social performance and explicitly included employees as a unit of analysis (Wood, 1991) very few authors have actually examined how the internal CSR practices influence employees attitudes and behaviors’ within the context of a developing country like Nigeria. This study attempted to bridge this study gap by investigating the internal CSR` in relation to how it influences employees’ performance in the Nigerian banking sector.
Within the academic circle, there are study studies that have focused on the influence of CSR on employees; some of these studies are reviewed in this section of this study. Strand et al. (1981) utilized the information integration theory (decision-making processes) to study the influence of CSR on employees as it relates to social and personnel policies of the corporation and entry preferences. They employed the use of scenarios manipulating corporate responsibility toward its physical environment, opportunities of career advancement, social justice and pay. Findings of that study revealed that employees in their considerations of entry preferences integrated social and environmental dimensions, though this had a low weight in the attribute function. Thus, CSR can influence employees both positively and negatively.
Auppperle et al. (1985) conducted a study utilizing an elaborate instrument administered to CEO`s to measure the degree of orientation to CSR based on Carroll (1979) CSR model. The result is indicative of a nil relationship between social responsibility and profitability with varying levels of CSR orientation not having a correlation with differences in performance. Furthermore, they argued that previous studies that revealed a relationship are reflective of ideological bias or limited methodology. Sims and Kroeck (1994) examined the influence of ethical fit on employee attitude and turnover intentions, and found that organizational CSR practices can positively influence employee performance.
Turban and Greening (1997) studied the relationship between CSR and employees as it relates to corporate social performance (CSP). They adopted the social identity and signalling theories as the theoretical mechanism, survey and regression analysis. That study also employed the KLD ratings as a measurement of CSP; and found that CSP was positively related to corporate reputation and attractiveness to employees. Riordan et al. (1997) extended their study on CSR influence on employees to include corporate image as a proxy of social performance. Their study focused on both external and internal dimensions of CSR and adopted a theoretical framework on organizational identity and signaling theory. Based on survey strategy and structural equation modeling, the study revealed that corporate image as perceived by employees had a positive effect on employee job satisfaction and a negative effect on turnover intentions.
Maignan et al. (1999) studied CSR and corporate citizenship as they relate to employee commitment. The study adopted the resource-based view of competitive advantage as a theoretical framework. It revealed a positive influence of corporate citizenship on employee commitment by marketing executives. Albinger and Freeman (2000) also investigated the link between CSR and CSP. That study adopted social identity theory and theories as theoretical framework with CSP as the independent variable measured by an index developed by the authors and organizational attractiveness as the relevant dependent variable. The focused of the study was on the external dimension of CSR, and the study revealed that CSP was positively related to employee attractiveness
Maignan and Ferrell (2001) conducted a study on corporate citizenship among French managers. That study focused on both internal and external CSR as it relates to employee commitment. Using a resource based view of competitive advantage theoretical mechanism, survey methods and structural equation modeling, that study indicated that there was a positive influence of corporate citizenship on employee commitment and that only the discretional component of corporate citizenship was strongly correlated to employee commitment. Similarly, Hillman et al. (2001) investigated the relationship between corporate social performance and organizational attractiveness and firm familiarity. The authors adopted signaling theory, reputation and organizational image as their theoretical background for that study. The findings indicated that CSP positively and indirectly influenced the organizational attractiveness by increasing the level of firm familiarity. In another study by Bowling et al. (2010) it was also revealed that organization-based self- esteem has a positive correlation with employee performance. That study relied on a meta-analysis of the predictors and consequences of organization-based self-esteem in examining the relationship between job satisfaction and subjective well-being. Carmelli et al. (2007) conducted a study on organizations in Israel and the result showed evidence of a positive influence of CSR on employee performance.
Elsewhere Heiner and Boon (2002) explored the external dimension of CSR and employee attractiveness. The authors utilized survey and quasi-experimentation method, T tests and ANOVA analysis with a sample of 297 undergraduate students in the first survey and another 110 in a second survey. Findings of the study indicate that environment, community relations and diversity have a stronger influence of employee attractiveness than other facets of CSP. Peterson (2004) study also focused on the internal dimension of CSR using 278 business professionals to investigate corporate citizenship and employee commitment. That study followed that by Maignan and Ferrell (2000) and used 18 items scale of corporate citizenship including economic, legal, ethical and discretional; utilizing survey methods and hierarchical multiple regression analysis. The findings show that there was a positive correlation between corporate citizens’ perception and employees’ commitment. Interestingly, it was also observed that employees that believed in CSR showed a stronger link.
3.1. Study Design
A qualitative method was adopted for the study because flexibility in data gathering was essential to understand the internal CSR practices of the banks. The sample population for the interviews was directors and executives of CSR from the main six banks operating in Nigeria based on their per-capital shares and nationwide presence. The participants in the interviews were recruited using multi-methods this pattern of study is called inductive study design. The interview questions were opened ended in nature and structured based on the findings of literature on internal CSR and divided into sections. The Nvivo9 software was used to conduct the analysis of the data collected and create the theme needed to successfully achieve the study objectives. According to Castello and Lozano (2011) the Nvivo9 Software interprets and converts qualitative data into meaningful information that can be used for analysis. NVivo9 Software was used to arrange the responses from the questionnaires. After this, a coding scheme was developed by using a word frequency technique to highlight the key issues prevalent in the survey questionnaire. According to Fereday and Muir (2006) the process of data analysis involves three steps:
4.1. Presentation of Interviews Findings
This section of the study presents the summary of responses obtained from the interviews with the CSR Executives and the CSR Directors of the banks. As noted earlier, 12 interviews were conducted in six main banks in Nigeria; namely, Zenith Bank, Fidelity Bank, Skye Bank, Access Bank, Keystone Bank and United Bank of Africa. Although the banks visited are mentioned, the responses ware not identified directly with the banks individually. Similarly, as stated in Section 3.6.1, anonymity of responses from the banks will be maintained in the course of presenting and discussing the findings of this study. Therefore, the responses from the CSR Directors in the six banks are represented as CD (B1, B2, B3, B4, B5 and B6), whilst responses from the CSR Executives are represented as CE (B1, B2, B3, B4, B5 and B6). The summaries of the responses of both the CD and CE are presented in tables as shown in the next sections.
4.2. Interviews
Table-4.1. Communication methods of the internal CSR practices to employees
Theme: Employee Engagement/ employee awareness | ||
Resp. | Responses | Summary |
CD B1 | We put it on the intranet and everyone is told where/what the new policy is and the changes. We always utilize feedback before implementing a new policy. Even when there is an update, everyone is put under notice. | It is communicated through the intranet. |
CD B2 | We communicate to the employees in different ways, we send out notices via emails and we regularly give updates. | It is communicated via emails |
CD B3 | The employees are constantly kept informed about the institutions CSR policies via email. The fact is that we carry them along in all that we do. | It is communicated via emails. |
CD B4 | The internal CSR policies are communicated to the employees through our intranet. Everyone is kept informed about updates and new programmes. | It is communicated through the intranet. |
CD B5 | It is well communicated in the company’s internal journal, so every employee is aware of what we are doing and what is expected of them. | It is communicated through internal journal. |
CD B6 | They receive email updates on all our CSR policies. | It is communicated through emails. |
CE B1 | It is placed on the intranet, so everyone is adequately communicated to. | It is communicated through the intranet. |
CE B2 | We send out emails with regular updates. | It is communicated via emails. |
CE B3 | They receive emails. | It is communicated via emails. |
CE B4 | We utilize the intranet to communicate these policies to our employees. | It is communicated through the intranet. |
CE B5 | We regularly communicate our policies as well as updates through the bank`s internal journal and every employee receive both soft and hard copies. | It is communicated through internal journals. |
CE B6 | We send out emails informing the employees of these policies. | It is communicated via emails. |
Table-4.2. Contributions to Employee Work
Theme: Employee Engagement/ Organisational Identity | ||
Resp. | Responses | Summary |
CD B1 | Yes it does. We have a unique policy, which goes beyond the employees to meet the needs of their family members. We have in some cases sent spouses and children of employees for medical treatment both within and outside the country especially when faced with life threatening cases. When we see that our not intervening could be a distraction to our employees which can be a traumatic experience. So our policy or it caters or when it is necessary to extend to other family relatives. When an employee is satisfied, it enhances productivity and that has a direct impact on our bottom line as a profit oriented institutions. |
Employees are motivated by the CSR activities. The internal CSR policies contribute to employee performance. |
CD B2 | I think some them or rather a lot of them do particularly the health aspect, jogging exercise and training aspects. There are several aspects i think generally motivate and help them to give their best. The practice is okay, just that our grouping of it has been different. So we change the concept, we will be able to drive it better |
The internal CSR programmes motivate employees. The programmes contribute to employee performance. |
CD B3 | It does. They are so motivated that they are presently surpassing the objectives we set out from the beginning of our CSR initiative. You see our employee volunteering scheme is a huge success which has created a sense of bonding amongst our staff nationwide. And the main motivating factor to this is the banks CSR activity. It really contributes positively to employee performance. I think the social exchange theory explains this, because employees tend to exchange the good feeling and satisfaction they get from internal CSR into improved performance which in the long-run contributes to productivity. |
Employees are highly motivated by the CSR activities. The programmes positively contribute to employee performance. |
CD B4 | I would say it motivates them positively. We have a low rate of employee turnover, and we see how eager our employees are interested in giving back to the society through the volunteer scheme. I think job satisfaction is directly related to performance. So we believe the internal CSR policy of our bank positively contributes to employee satisfaction and this a contributing factor to employee performance. | Employees are positively motivated by the CSR activities. The programmes positively contribute to employee performance. |
CD B5 | Yes, it does. Commitment is spurred. Well, the issues you have mentioned here can contribute to employee performance but I think the degree of its contribution is still minimal. Employees here are mainly motivated by financial rewards and remuneration. To be candid, this society favours discrimination and inequality and there is largely no fair treatment. And institutions and businesses are a reflection of the society. So if you are to investigate you will find out that a lot of people do not really mind about all this things as long as they are catered for financially. We set targets for employees and they strive to meet them because of the financial rewards and not because the institution embarks on a good internal CSR. | Employees are motivated by the CSR activities. The contribution of these programmes to employee performance is minimal. |
CD B6 | It is highly motivating for the employees. Internal CSR motivates employees and a motivated workforce is inspired to perform, so it is a positive contributory factor to employee performance. | Employees are motivated. Internal CSR contributes to employee performance. |
CE B1 | Our employees are motivated by the CSR activities. Our CSR strategy is very unique because it goes beyond the work place environment to cover family members of our employees Internal CSR provides job satisfaction and this contributes positively to employee productivity. So i will say that our internal CSR strategy contributes to employee performance. |
Employees are motivated. Internal CSR contributes to employee performance. |
CE B2 | The employees are motivated. This has already been ascertained from the feedback we get and the degree of their participation in these activities shows that they are highly motivated. I believe that our internal CSR programmes contribute to employee performance. |
Employees are motivated. Internal CRS contributes to employee performance. |
CE B3 | The programmes are highly motivating to the employees. We also have an employee volunteering scheme which was born out of the CSR culture and the rate of employee participation in this scheme buttresses the fact that they are motivated by the institution`s CSR activities. Yes. The internal CSR programmes contribute positively to employee performance. |
Employees are highly motivated. Internal CSR contributes to employee performance. |
CE B4 | The employees are motivated by the internal CSR activities of our bank. The programmes are hugely beneficial to the employees and in the long-run, we believe it is a positive contributory factor to employee performance. |
Employees are motivated. Internal CSR contributes to employee performance. |
CE B5 | The programmes are designed to meet the needs of our employees. So they are motivated by it. Yes. We believe that it contributes positively to employee performance. |
Employees are motivated. Internal CSR contributes to employee performance. |
CE B6 | Our employees are motivated by the institutions CSR activity. From the feedback and responses that we get some of them talk about how they are inspired by these CSR initiatives. Yes it does. We believe an inspired workforce will be a highly productive workforce. So these programmes contribute positively to employee performance. |
Employees are motivated. Internal CSR contributes to employee performance. |
In figure 4.2, the word cloud shows that the bank management generally believes that engagement in internal CSR generally improves employee motivation, which also enhances performance.
4.3. Major Findings
From the findings of the review of literature, a number of factors could contribute to the level at which internal CSR influence employee’s performance. These include the level of employee awareness of the existence of internal CSR practices; employee perception of CSR activities; individual CSR beliefs of employees; social identity of employees and the overall organisational CSR adoption and integration of CSR. The literature has also highlighted the role employee engagement can play in creating awareness of the existing of CSR programmes and shaping perceptions of these programmes. Thus far, the discussion in this Chapter has highlighted that there is a high level of awareness of internal CSR in the Nigerian banks; and that employees in the Nigerian banking sector have a positive view of the CSR activities of their banks. It has also been stressed that there is a clear link between individual and organisational belief of CSR based on the need for a joint development of the Nigerian society by government and corporations.
To explain the connections between the social exchange theory and the findings of the current study, the main internal CSR practices identified here are the basis of exchange, which the organisations use to instigate positive social exchange interactions. The finding here have also noted that the main internal CSR practices prevalent in the banks include practices such as; i) health and safety; ii) employee engagement programs; iii) work life balance programs; iv) remunerations; v) employee development policy; and vi) employee welfare scheme. These internal CSR practices identified add to the discussion in this section. These identified internal CSR practices according to previous studies (Gouldner, 1960; Ekeh, 1974; Cheney, 1983; Bhattacharya and Sen, 1995; Abraham et al., 1998) could be identified as the bargaining tools organisations engage in to influence the responses they can get from their employees. However, it is noteworthy that the extents to which the positive responses that employers expect from their employees are generally based on how employees accept those practices as appropriate negotiating tools that could result in positive behaviors. In this area, this study indicates that the employees believed that the aforementioned internal CSR practices contribute towards their work. Chief among the practices identified is remuneration. In fact, most of the employees that participated in the questionnaire survey agree that remunerations were the most powerful negotiating tools employers use to influence positive behavior from employees.
5.1. Conclusion
It was also observed that employees perceived CSR from a positive perception and they generally believed it was a good thing for their organisations to be engaged in these CSR activities. As a result, the employees believed they shared a common interested of the overall development of the Nigerian society with their banks’ leading to some sorts of integration between employees’ personal believes with that of their organisations.
The study shows that internal CSR practices generally contributed positively to employee work. Consequently, the internal CSR practices were viewed as bargaining tools, which the banks could utilize to encourage positive behavior from their employees. In fact, employees in the Nigerian banking sector were found to reward their employers for fair treatment through commitment and improved performance.
5.2. Recommendation
The following recommendations were made
First there is a need for the promotion of the importance of internal CSR in the Nigerian banking sector. This assignment should not be left for the banking sector alone, but an integrated shared responsibility approach that creates the opportunity for key player in the banking sector including government, NGOs, community-based organizations, labour unions to engage in promoting internal CSR activities.
Second there is also need for the development of a sound and robust policy, institutional and regulatory framework that supports and promotes internal CSR. To achieve this, government agencies, NGOs and the banks should work together to ensure that there are concerted efforts in addressing social challenges through effective CSR practices. In addition, the legislators need to integrate internal CSR policies to the CSR Bill and speed up the process of passing the CSR Bill into law.
Third the banks in Nigeria to benefit maximally from the adoption of internal CSR practices, they need to adjust their operational structures so that internal CSR can be properly defined and treated as a department or unit under their operational structure. This will ensure that adequate attention is given to internal CSR practices, with the aim of promoting further the development of the CSR practices in the Nigerian banking sector.
Funding: This study received no specific financial support. |
Competing Interests: The authors declare that they have no competing interests. |
Contributors/Acknowledgement: Both authors contributed equally to the conception and design of the study. |
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